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NATO is sketching out plan to meet Trump call for 5% of GDP on defence

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14th May 2025

By: Bloomberg

  

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NATO allies have started cobbling together an agreement to significantly boost defence spending in a way that may assuage US President Donald Trump’s demand to spend 5% of economic output on the military.

Negotiators in the military alliance are making progress on a path to achieve 5% of GDP on defence and defence-related spending by 2032 ahead of a North Atlantic Treaty Organization summit in The Hague in June, according to diplomats familiar with the matter. NATO foreign ministers will discuss the initiative at a meeting in the Turkish resort city of Antalya Wednesday and Thursday.

The Mediterranean meeting takes place against a rush of diplomacy as the Trump administration pushes to end the war in Ukraine that’s dragged on for more than three years. Ukrainian President Volodymyr Zelenskiy said he’s prepared to meet face-to-face with Vladimir Putin in Istanbul Thursday as the warring sides grapple with demands for a ceasefire. The Russian leader has given no sign he’ll come.

Agreement on defence spending on the scale that Trump demands — none of NATO’s 32 members, including the US, has achieved that threshold — would mark the biggest spending increase by Western allies since the end of the Cold War as NATO members retrench since Russia’s invasion of Ukraine.

Since his first term, Trump has hectored allies for failing to meet a long-standing 2% threshold for spending. Eight of 32 allies hadn’t reached 2% spending as of NATO’s annual report in April.

Secretary General Mark Rutte is pushing allies to agree to a level of 3.5% of GDP in the next seven years, topped by an extra 1.5% earmarked for a wider set of spending related to defence, according to senior diplomats who spoke on condition of anonymity to discuss talks being held behind closed doors. That initiative was first reported by Reuters.

Rutte, speaking to reporters in the US last month, said the goal for the Hague summit — Trump’s first since returning to the White House — would be to re-balance spending within the alliance considering the outsize US proportion compared with European NATO allies and Canada.

Ministers in Antalya will discuss what kind of spending would count toward the 1.5% component, including areas such as military mobility, dual-use goods and cybersecurity, the diplomats said, adding that talks are in an initial stage. It remained unclear whether that segment would include existing spending or require fresh commitments.

Rutte’s proposal includes a regular and rigorous verification mechanism, unlike the looser goals set currently by allies.

Boosting spending by an order of magnitude in the time-frame being discussed will be an enormous challenge, one senior European diplomat said, though many now view the effort as necessary to send a strong message to the Kremlin.

Some NATO members, including Italy and Spain, have only recently announced reaching the 2% level. All are expected to meet the old benchmark by the summit, according to a person familiar with the issue.

The new core 3.5% target is based on ambitious new defence plans being drawn up by NATO. The alliance has distributed detailed, highly classified lists of weapons and other capabilities to member governments, which defence chiefs will discuss in Brussels on Wednesday.

The lists, known as capability targets, have been broadly accepted by allies and are likely to be signed onto at a meeting of defence ministers in Brussels in early June, according to people familiar with the discussions. That will leave formal adoption at the June 24-25 summit in The Hague.

The summit is expected to be shorter than previous gatherings and focus on spending and an industrial ramp-up, culminating in a short declaration, according to European diplomats. One diplomat said the subject will be the alliance — and not Ukraine’s future within it.

Trump’s skepticism of Ukraine’s NATO membership has taken the option off the table for now — and an extension of NATO’s $40-billion pledge to support the war-battered nation drawn up last year has also not been discussed.

Another Rutte initiative on the table involves overhauling the alliance’s efficiency and internal governance, people familiar with the discussions said. The shakeup effort could appeal the US president, one person said.

Edited by Bloomberg

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